Financial position

Financial position and use of resources (Torbay and South Devon NHS Foundation Trust)

Our aim with this section of the review is to describe the financial resources available and how they have been used in the care sector. On 01 October 2015, an Integrated Care Organisation (ICO) was formed, and this organisation’s remit was to provide Adult Social Care (ASC) on behalf of the population of Torbay. From a financial perspective Torbay Council’s role as a commissioning body is to provide a funding contribution to the overall running costs of the ICO. In 2024/25 the council income contribution, including grants amounted to £65.6million. This was made up as follows.

The ICO provides a diverse range of service, of which ASC is a part. The ASC aspect specifically comprises of care management and social care support across Torbay as well as the cost of social workers, community care workers, occupational therapists, physiotherapists, finance and benefit assessors and support service staff. The council contribution towards ICO running costs aims to cover the cost of these staff, in addition to the actual cost of client care (outlined in more detail below).

The vast majority of ASC spend is used to purchase client care (including residential, nursing, supported living and domiciliary care) from independent providers. The majority of these providers are based in Torbay; however, the ICO also funds some specialist residential care provided out of area. 

Net expenditure on the cost of care totalled £82.3million in 2024/25. This is the net figure after taking into account all client contributions towards the cost of care.

Adult social care - gross expenditure breakdown 2024/25 (£ms)

*Image shows - Bar chart titled 'Adult Social Care – Gross Expenditure Breakdown 2024/25 (£ millions).' It shows spending across seven categories: Residential (£47m), Nursing (£8m), Domiciliary (£23m), Supported Living (£15m), Day (£2m), Direct Payments (£10m), and Other (£3m). Residential care has the highest expenditure, followed by Domiciliary and Supported Living.

Under national legislation people assessed as having a social care need are also given an individual financial assessment. This assessment can result in a client being asked to contribute towards the cost of any care that the council then puts in place. The income collected from these client contributions in 2024/25 amounted to £23.6million. The total (gross) expenditure on services was £105.9million and the allocation of this gross expenditure across different types of services is illustrated in the following chart.

At any point in time throughout 2024/25 we are supporting more than 2,700 people and these services are provided to people aged 18 – 100 (and older), who have a range of needs such as learning disabilities, mental health issues, dementia, as well as those with sensory or physical disabilities, vulnerable people, and the frail and elderly.

Continuing from last financial year, in 2024/25 Torbay and South Devon NHS Foundation Trust has faced a number of ASC challenges linked with sustained pressure from the health system in general and a marked increase in the volume of people needing support, as mentioned above.

There has also been a continued increase in complexity which has seen the average cost of packages of care rising throughout the year (over and above any inflationary uplift). Underpinning this is the dynamic between care work and hospitality work and the latter have increased renumeration to attract workers into their sector. In the last couple of years to acknowledge this, the council, through national funding (ASC Market Sustainability) has been able to increase some rates to residential, nursing and domiciliary providers. This rise in cost has continued despite the volume of clients tailing back, highlighting the impact of the net movement of new clients coming into the system at higher rates.

Financial outlook for 2025/26 and beyond

The 2025/26 fee setting process is now complete and a new structure has been shared with providers.

Partners are working closely together on a joint adult social care transformation programme (using identified council reserves), to identify improvements  and efficiencies to the current operating model in Torbay to address the variance in budgets set and costs accrued , focussing on areas such as robust commissioning arrangements, improved contractual management, streamlined processes and procedures, enhanced reablement offers, greater choice and control for individuals, improved learning disability support and additional extra care provision.

Financial pressures, together with the ageing profile of our population, mean that we must optimise all the adult social care funding we have available.

The ICO and its partner organisations are committed to ensuring resources are managed to ensure the best level of care, for the highest number of people, can be provided. Both Torbay Council cand NHS Devon Integrated Care Board acknowledge the pressures facing health and social care and continue to believe that the ICO is still best placed to manage these services.

The ICO will aim to achieve this through the managing of resources across health and social care to deliver a more efficient and effective profile of expenditure. This is needed not only to maintain a financially stable and sustainable model of care, but one that can improve people’s experiences. Any development will be done in partnership with the Local Authority. Any service developments will be co-produced with individuals in receipt of care and support, and we will consult with staff and care providers when appropriate.